Algorithmic stablecoins and the TerraUSD incident
The TerraUSD crash was a defining moment in crypto, with billions of dollars lost, and many projects left in a vacuum.
As you know, I have been personally involved in stablecoins. I published some research on stablecoins a few months ago, and I have also been personally involved in a project called BankX which combines elements of partial collateralisation, with an algorithmic peg. I conducted the tokenomics audit on this project, and also recently published the findings in the Journal of the British Blockchain Association.
The recent incident raises many interesting questions. Up to the point of the crash, Terra was a good example that algorithmic stablecoins can work. However, there was lots of scepticism within the community as to how resilient the project was. This led to Terra building up reserves in Bitcoin in order to defend the peg. However, apparently they did a bad job at it, according Binance’s CEO.
Report on TerraUSD and algorithmic stablecoins
Therefore, when the TerraUSD crash took place, I felt that I couldn’t sit and do nothing. I went back to the Tesseract team, and we decided to do what we know how to do best: utilise our network of experts, in order to get some clarity around questions such as the future of stablecoins, whether we are in a bear market, and what the future holds for crypto regulation.
The report can be found on Tesseract Academy’s website with the title Tesseract Report – Do algorithmic stablecoins have a future?
The report yields many interesting conclusions, with one being that algorithmic stablecoins are not dead yet! This is good news for projects like BankX that combine elements of algorithmic stabilisation with other DeFi techniques.
Blockchain, tokenomics, AI, and data science
If you are interested in topics such as tokenomics, blockchain, AI or data science, make sure to get in touch. I am providing services on all those areas, either in individual capacity or through the Tesseract Academy and the network of experts it operates. In any case I will be happy to hear from you!